My ailing father wants to make a £2,500 wedding gift to his grandson, but will it cause him problems over his care funding?

My father is 96 and it is looking very much as if, for the first time, he will need care support from our local county council in his flat in the very near future.

We have recently entered the new tax year and my father wants to make a gift of £2,500 to his grandson for his wedding on August 9 this year and also to make a gift of £3,000 to be shared between my brother and me, which I believe is an annual exemption gift.

If he makes these two payments in the next couple of weeks it will take his total savings about £2,000 below the £23,000 threshold.

Gift: The reader wants to give his grandson money for his wedding as part of his tax exempt gifts, but what are the implications for care?

Is it likely that the county council will allow this when they make the financial assessment of my father for his care?

Adam Uren, of This is Money, says: I've spoken to multiple financial advisers about this sort of issue and the word that keeps cropping up time and time again is 'minefield'.

The issue of care funding is one that varies hugely depending on individual circumstances and the local authority in question, leaving a vast expanse of shades of grey in between.

In your case, your father is worried that gifting money to his grandson and to you and your brother will send his estate below £23,000, which means he would qualify for state funding for his care needs.

In doing so though, his local council could consider him to have carried out 'deliberate deprivation of assets' in order to avoid funding the costs of his care.

If this happens within six months of your father entering care and the local authority believes it was gifted in order to avoid care costs, then the council can legally seek to get the money back from the person or people the money was given to.

If it's longer than six months, local authorities can still refuse to fund the care if it thinks deliberate deprivation has occurred.

Were this to happen, the remaining £21,000 in your father's estate will have to be used to fund his care, after which the state will probably have to step in if no other sources can be found.

I will say that there's no way of getting a definitive answer on this, given that the decision will ultimately be up to the local authority in question.

The figures you're talking aren't exactly massive - he's not giving his house away for example - and I spoke to care home fees solicitor Andrew Farley, of Farley Dwek, who thinks that it would be extremely unfair for a council to penalise your father for making use of his tax exemptions.

He said: 'Although I have not actually had an argument with a Local Authority about this type of gifting and the fact it may take someone below the threshold I would say that it would be extremely prejudicial to prevent someone from utilising tax allowances that are embodied in legislation for all to use just because a care need may be on the horizon.

'We are all at liberty to use tax allowances but in these scenarios we need to look at why the gift is being made.

Concerns: The reader's father is worried that giving money to his kin could get him in trouble once he enters care.

'The donor in the first instance wishes to congratulate his grandchild on his marriage and that is a perfectly normal reason to make a gift and the very reason the particular allowance is in existence – to encourage such a gift - so it would be hard to argue it was a blatant attempt to get assets below the threshold when the law encourages the gift to be made in these circumstances.

'The fact the donor may need care in the same year as his Grandchild is getting married is not premeditated.

'The annual allowance is perhaps more of an issue but again why should the deprivation rules impinge on the ability to undertake sensible estate planning and make use of tax allowances that are on a plate.

'If there is no history of ever using the annual allowance I would however look at what has suddenly prompted it. There may be a reason his sons need some capital and if so that reasoning should stand up as part evidence against deprivation, but as I say the timing here is important and a history of whether the donor ordinarily uses his allowance is in my view a factor.

'What would be a very sensible line of advice is for everyone (who can afford it) to start the annual practice of gifting the sum of the annual allowance so that the argument of timing goes away as they’ve always engaged in the practice of gifting it.”

Danny Cox, head of advice at Hargreaves Lansdown, agreed with the spirit of Mr Farley's comments, though he did warn there could be a problem given the proportion of your father's estate that has been gifted.

He says: 'There is potentially a lot of subjectivity in the deliberate deprivations of assets rules and gifting for a wedding could/should be alright, although the size of the gift relative to other assets might cause an issue.'